Polwo

Arbitrageur Who or What Is an Arbitrageur? An arbitrageur is a person, company, or institution that profits by simultaneously buying and selling an asset in different markets to take advantage of price discrepancies . These price differences can last for only seconds, so arbitrageurs must act quickly—often using algorithms and automation—to capture profits before the market corrects itself. Why Arbitrageurs Matter in Modern Finance Arbitrageurs are vital for keeping financial markets efficient and balanced . By exploiting price differences, they: Correct mispricings across exchanges Boost liquidity Tighten bid-ask spreads And ultimately help ensure fair pricing for all market participants Whether it’s global stock exchanges, currency markets, or fast-moving crypto platforms , arbitrageurs are the unsung heroes that help financial systems run smoothly. Arbitrage vs Arbitrageur Arbitrage is the process or strategy of exploiting price differences. An arbitrageur i...

Arbitrage Understanding Arbitrage Arbitrage is the practice of taking advantage of price differences of the same or similar financial instrument across different markets. It involves buying low in one market and simultaneously selling high in another to lock in a risk-free profit . This mechanism plays a critical role in ensuring pricing consistency and efficiency across global markets . At its core, arbitrage rests on the idea that the same asset should not have multiple prices at the same time in different places. If such discrepancies occur, arbitrageurs step in and exploit the gap, effectively restoring balance to the system. This self-correcting nature of arbitrage makes it one of the most vital forces in financial markets . Why Arbitrage Exists in Financial Markets Despite the advancement of trading technology and the presence of thousands of market participants, financial markets are not always perfectly efficient. Price discrepancies can arise due to several factors: Tim...